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P&G reports better-than-expected rise in profit, but sales drop

Procter & Gamble, the maker of Tide detergent and Gillette shaving products, reported a better-than-expected rise in quarterly profit, boosted by cost-cutting and higher selling prices.

However, sales declined for the seventh quarter in a row as P&G shrinks its vast product portfolio to focus on faster-growing brands such as Pampers diapers and Gillette.

Shares of P&G closed down 2.3 percent Tuesday. (Get the latest quote)

The company said its cost of goods sold fell by 11 percent to $7.92 billion, while it raised prices by an average of 1 percent in the third quarter ended March 31.

P&G, which has posted declines in sales for the last seven quarters, has been shrinking its portfolio to focus on faster-growing brands such as Tide detergent and Gillette shaving products.

P&G Chief Financial Officer Jon Moeller acknowledged that the company needs to return to top-line growth. He told CNBC's"Squawk Box" that P&G's current portfolio of 10 categories are best positioned to benefit from its core capabilities and technology.

"We're in great product categories that are growing 3 to 4 percent globally. There's other categories out there that fit that profile, and as long as we stick with that, I think we'll be just fine."

The company has been able to raise prices in a number of global markets, particularly in Latin America, he said.

However, the persistent strength of the dollar continues to create headwinds for the multinational, he said. P&G absorbed a roughly $200 million after-tax impact since December even as the greenback eased against other currencies, he added.

P&G said it now expects full-year core earnings to fall 3 percent to 6 percent, compared with the decline of 3 percent to 8 percent decline it had estimated in January.

The company expects organic sales to be driven more by volume than pricing in the next two to four quarters, Chief Financial Officer Jon Moeller said on a media call.

P&G's third-quarter net revenue fell 7 percent to $15.76 billion, including a 5 percentage point negative impact from foreign exchange.

Excluding acquisitions, divestitures and currency movements, sales rose 1 percent.

Net income attributable to P&G jumped to $2.75 billion, or 97 cents per share, from $2.15 billion, or 75 cents per share.

Excluding items, the company earned 86 cents per share.

Analysts on average had expected earnings of 82 cents per share and revenue of $15.81 billion, according to Thomson Reuters I/B/E/S of 82 cents per share and revenue of $15.81 billion, according to Thomson Reuters I/B/E/S.

— CNBC's Tom DiChristopher contributed to this story.